What Bourbon Street is to New Orleans, Mathew Street is to Liverpool. The short, cobbled alley is the site of the tiny boite, the Cavern Club, where the Beatles played in the early 1960s. It forms the center of the recently named Beatles Quarter, and is teeming with tourists who want to pose beside the John Lennon statue or under one of the plaques dedicated to the band.

Just outside Liverpool, the family of "fifth Beatle" Pete Best is touting its basement, once a popular music venue called the Casbah Coffee Club. A George Harrison quote is etched on the window of a local beauty salon. "A good place to wash your hair, Liverpool—good, soft water," he reportedly said. Local buses carry the tagline for the city's John Lennon Airport: Above Us Only Sky.

In recent months the Beatles heritage industry has had a new burst of activity. The first ever Beatles-themed hotel—Hard Days Night Hotel, of course—opened its doors in February. In March, a local transportation company acquired The Beatles Story museum and announced its plans for a second location.

The band wasn't always so celebrated—or so exploited—in its hometown. Liverpudlians, famed for snubbing their noses at the rich and successful, had little love for these musicians who had left for London and Los Angeles. And 30 years ago, Liverpool was coping with race riots, dock strikes, and an unemployment rate of 20 percent. Crippled with debt, the city was unable to capitalize on the Beatles connection.

But over the years, Apple Corps Ltd., the business originally set up by the Beatles to reinvest their earnings, has quietly helped Liverpool get on its feet. Notoriously difficult to deal with and fiercely protective of the Beatles legacy, Apple Corps appears to have turned a benevolent blind eye on the city's burgeoning business of the Beatles. In return, many businesspeople in Liverpool tread carefully, knowing that Apple Corps could put an end to many ventures with a simple letter.

"A lot of people in Liverpool have been using images that you wouldn't get away with elsewhere, but there's been a reluctance to clamp down," says Bill Heckle, a former schoolteacher who started Cavern City Tours in 1983. The company operates the Magical Mystery Tour, a bus ride to Beatles landmarks, and organizes International Beatle Week each August.

But some locals are wondering whether the relationship is on the cusp of change. For 40 years, Apple Corps was headed by Neil Aspinall, a Liverpool-born school friend of Paul McCartney’s and a Beatles roadie. Aspinall retired in 2007 and died in March; there is speculation that his successor, Jeff Jones, will become more aggressive about monetizing the Beatles brand. (The company declined to comment on any aspect of this story.)

"Liverpool was very late getting in on the act," observes Tony Barrow, who was press officer for the Beatles during their formative years, from 1962 to 1968. That all changed in December 1980, when John Lennon was murdered in New York and fans began making pilgrimages to his birthplace.

Heckle recalls the tourist office being inundated with people. "But there was no place to see and no one to take them around," he says. That changed over the years, and now myriad people, from taxi drivers to T-shirt vendors, trade on interest in the Beatles, not all legitimately.

When asked about his relationship with Apple Corps, Heckle speaks carefully and explains that his dealings have fallen into a kind of gray area. He keeps the company informed of his business plans, but never poses any questions. The unspoken agreement is that Heckle will hear from lawyers only if there is something they don't like, usually a copyright that needs enforcing.

Barrow remembers discussing permissions with Aspinall. "Neil admitted to me, at that stage, it was easier to say no to anything because it was less time consuming," Barrow says. "He didn't want time-consuming negotiations."

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But locals believe that Apple Corps, operated by the remaining Beatles with Yoko Ono Lennon and Olivia Harrison, has been looking out for Liverpool. Paul McCartney "has been integral in repositioning the Beatles in this city," Heckle says.

In some cases, though, Apple Corps has simply not had the legal right to challenge certain uses. Hard Days Night Hotel uses pictures of the Beatles painted by a New Jersey-based artist. Unlike American law, which gives Marilyn Monroe's estate rights to her name and certain images, under British law, photographers and artists largely keep the copyright to their works. And no one had trademarked the Beatles' song title "Hard Day's Night", so the hotel was able to use it.

Jonathan Davies, a senior executive with Wellcare Developments, which operates the hotel, says the firm keeps Apple Corps up to date on its plans but is left to wonder about the company’s specific views on commercial use of the Beatles legacy.

"They do not acknowledge anything in writing," Davies says. "Using the deep T in the Beatles logo, they'll get upset about that. We also had some scaffolding outside [the hotel] and Apple Inc. wanted to run some ads for iPod Nano. In the end we decided not to accept it."

Heckle says in the past year a number of T-shirt vendors have received "cease and desist" letters, something that was previously unheard of. Officials at the Trading Standards Institute, an organization that's responsible for upholding British trademark laws, say they are investigating a single trader, but haven't received any complaints from Apple Corps.

Martin King, director of the tourism promotion department, Mersey Partnership, reels off the Beatles' many efforts to help the city: Paul McCartney founded the Liverpool Institute of Performing Arts; Yoko Ono appeared at the naming of the airport; John Lennon's half sister Julia Baird opened Hard Days Night Hotel. But even King is wondering what might change. "Neil Aspinall had controlled Apple Corps until recently. It will be interesting to see to what extent the Beatles legacy will be rather more available."

In the Beatles-themed art gallery adjacent to the Hard Days Night Hotel, a local musician, David Hughes, and his young daughter are browsing postcards. She says George Harrison is her favorite Beatle. He laughs about buying one of the bricks that supposedly came from the Cavern Club demolition site. "Liverpool had nothing, and now it's coming out of its shell," Hughes says. "But the Beatles don't belong to just to Liverpool, they belong to the world."